In line with our previous article regarding Sovereign Currencies, German Banks Association are pushing forward the idea of a European Cryptocurrency.
The Bankenverband association, representing 200 German private Banks, published a paper to defend the need of a European Sovereign Cryptocurrency.
In the article , they clearly state their motivation:
“It is undisputed that responsibility for the monetary order lies with the sovereign states and will continue to lie. Any supply of money, whether from banks or other private companies, must therefore fit into the state-mandated order. Anything else would result in chaos and instability.”
Not surprising, we can understand that decentralized monetary system is only synonym of Chaos for them, not mentioning it jeopardizes their solely control and authority. It is urgent for them to integrate the cryptocurrencies in the existing financial system to stop any other Crypto Financial system initiatives and alternatives:
“These innovations have the potential to fundamentally change the way we pay and how we store values. This makes it all the more important to reach a social consensus on how programmable digital money can be integrated into existing financial systems.”
The need for a Stable Cryptocurrency
“A stable currency is the basis of any economic system; guarantee them as a core element of state sovereignty. A stable currency is the basis of any economic system; guarantee them as a core element of state sovereignty”.
We can of course agree with this statement; nevertheless, why would that means it has to be integrated in the existing banking & financial system? Would there is any other way to maintain stable cryptocurrencies?
Decentralization: The Ennemy
And to lock a bit more (if not totally) any other option of a new financial era:
“All innovators must be measured against a single regulatory and regulatory framework. The issuance and custody of programmable digital money should also be possible under the current set of rules for a full banking license. Private Banks expect legislators and regulators to lay the necessary foundations for digital innovation, especially in the banking sector.”
To resume: The Banking association considers Cryptocurrencies financial system should follow the same rules as the monetary one under the same legislators and regulators authority.
As you can forget about decentralized monetary system, forget the anonymity that some cryptocurrencies carries:
“The identity of the user of a digital euro, whether man or machine, must be clearly identifiable. This requires a European standard of identity, and, better still, a global standard. For any form of digital money, customers should be identified according to a standard as strict as banks or other obliged entities must take into account today under the applicable anti-money laundering rules.”
Indeed, this is probably the most important weakness of cryptocurrencies to gain trust and not being seen as a monetary system for illegal operations.
And to conclude:
“The private banks in Germany will contribute to a sustainable innovative monetary system. For this purpose, a programmable digital euro on an account and crypto basis should be created and its interoperability with giral money should be ensured. The prerequisite for this is the creation of a common pan-European payment platform for the programmable digital euro.”
I invite you to read the full paper in which they details not less than 9 positions towards cryptocurrencies.
The counter fight is already happening and it is clear that other Europeans countries will follow, even if, as of now, European Central Bank announced not having any European Sovereign Cryptocurrency project .
